US seeks to seize Russian criminal group’s real estate

Financial Times

US prosecutors are looking to seize New York property used by a Russian criminal organisation to launder funds derived from an elaborate $230m tax fraud, according to a complaint filed in a Manhattan court.
The civil action also seeks to impose money-laundering penalties on the companies set up by the organisation, whose members allegedly included corrupt Russian government officials, US Attorney Preet Bharara said.

“Today’s forfeiture action is a significant step towards uncovering and unwinding a complex money laundering scheme arising from a notorious foreign fraud,” Mr Bharara said on Tuesday in a statement.
“As alleged, a Russian criminal enterprise sought to launder some of its billions in ill-gotten roubles through the purchase of pricey Manhattan real estate. While New York is a world financial capital, it is not a safe haven for criminals seeking to hide their loot, no matter how and where their fraud took place.”

The $230m fraud was first uncovered by the late Sergei Magnitsky, a respected Russian lawyer who died in pre-trial detention in Moscow in 2009 shortly after making his whistleblowing allegations.

Prosecutors claim that members of the organisation stole the corporate identities of portfolio companies of the Hermitage Fund, a foreign investment fund operating in Russia, which were then used to make fraudulent claims for tax refunds through sham lawsuits. Officials at two Russian tax offices who were members of the organisation approved the disbursements.

Through a complex series of transfers through shell companies, $230m was laundered into numerous bank accounts in Russia and elsewhere, according to the civil complaint. A portion of the funds stolen from the Russian Treasury passed through a Cyprus-based property company Prevezon Holdings, which laundered the proceeds into Manhattan property including four luxury apartments and two high end commercial spaces, it is alleged.

The forfeiture is the latest piece of a worldwide investigation into the fraud from 2006, which Russian authorities have been reluctant to investigate.

Authorities in the US, Switzerland, Lithuania, Latvia and Estonia have already opened local criminal investigations related to the fraud. In addition to the $23.7m worth of assets that have just been frozen in the US, an additional $20m worth of assets have been frozen in Switzerland.

Bill Browder, chief executive of Hermitage, said he expected the other existing investigations to gather speed, and that additional criminal investigations could be opened in still more countries. “This is just the first step in a dragnet to basically seize all the assets connected to the criminal group [responsible for the fraud],” Mr Browder said.

The New York forfeiture comes less than a year after US Congress passed the so-called Magnitsky Act, which bans corrupt Russian officials, including those implicated in Mr Magnitsky’s death, from travelling to the US or holding assets there. In April, 18 Americans including Mr Bharara were banned from entering Russia in retaliation to the US law. срочный займ на карту займ срочно без отказов и проверок https://zp-pdl.com/get-a-next-business-day-payday-loan.php https://zp-pdl.com/how-to-get-fast-payday-loan-online.php быстрые займы онлайн